China faces jobs crunch as growth slows

Hiring has fallen as China’s growth slowed to 0.4% in the second quarter, weighed down by COVID-19 lockdowns.

August 25, 2022 02:41 pm | Updated 04:12 pm IST - Beijing

Chinese job seekers visit a job fair in southwest China’s Chongqing Municipality. Photo used for representation purpose only. File

Chinese job seekers visit a job fair in southwest China’s Chongqing Municipality. Photo used for representation purpose only. File | Photo Credit: AP

Even a couple of years ago, Byron Liu, a graduate of Beijing’s elite Tsinghua University, the alma mater of the country’s President, would have been a prized catch in a competitive job market.

Mr. Liu, instead, is among the 10.76 million graduating Chinese this year facing the worst job market in decades, as China’s economy deals with multiple pressures from slowing growth, a crackdown on the technology sector, and depressed sentiment on account of a continuing “zero-COVID” strategy.

In July, the youth jobless rate, for the 16-24 age group, rose to 19.9% as a number of graduates entered the job market in the summer, the highest figure since the National Bureau of Statistics (NBS) began publishing monthly data in 2018. And in June, payouts under the national unemployment insurance programme hit a record, according to Reuters data, up by 256% from the previous year to $5.42 billion. This was the highest since figures began to be published in 2013.

Hiring has fallen as China’s growth slowed to 0.4% in the second quarter, weighed down by COVID-19 lockdowns. In interviews with The Hindu, three businesses in Beijing in the services sector pointed to uncertainties because of the “zero COVID” measures as a major factor in freezing hires and even in layoffs. “A lockdown can happen at any time, and this year we closed for several weeks because of only one case in the neighbourhood,” said one manager. “It’s impossible to plan for the future”.

There are no signs of China exiting “zero COVID” at least until the once-in-five-year Party Congress set for October when President Xi Jinping will begin a third term as Party General Secretary.

Officials on Thursday acknowledged the youth unemployment problem in a press conference highlighting the employment record of the past decade. “Youth employment including college graduates’ wellbeing concerns the future of the country,” said Zhang Ying, Director of the Employment Promotion Department of the Ministry of Human Resources and Social Security.

In the past decade, the government achieved a target of 10 million jobs being created annually, Ms. Zhang said, maintaining a stable employment rate. “At the same time,” she acknowledged, "we face pressure, especially this year because of the pandemic, there has been a reduction in positions and cancellations of hiring events. Some youth are having new difficulties in getting a job.”

Ms. Zhang also warned employers against discriminating against job seekers who had previously tested positive for COVID-19, reflecting continuing stigma in China amid the “zero COVID” emphasis which remains firmly in place. Health resources are currently still focused on mass testing – Beijing requires every resident to test once in three days – rather than on a vaccination booster campaign, which would be a first step towards opening with a high number of the elderly population yet to receive booster shots.

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